(Update: Both H&R Block and Intuit will be raising the price of TurboTax Online for everyone Saturday 3/23. This expiration deadline also applies to the various discounted offers you can get by going through your stock brokers like Vanguard, Fidelity, TD Ameritrade, etc. You must actually finish your taxes (not just start) by e-filing or printing via the “file by mail” option to lock in a price. Also, if you don’t think you can file by April 15th, here’s how to e-File your tax extension online for free in minutes.)
According to a MyMoneyBlog.com reader poll taken last year, 52% used TurboTax, 18% used TaxACT, and 14% used H&R Block at Home to prepare their tax returns, which agreed with the most popular software overall in the US. The remaining 16% either used an accountant (10%), filed on paper (4%), or used another software (2%).
Last year, I used each of “The Big 3″ to do my taxes in order to compare and contract in detail the three software programs. (As an example, my TurboTax 2011 review talks about comma-insertion as a feature…) I plan to do the same thing this year, but to help you early-birds, here’s the highly-condensed version of my reviews:
Accuracy and Maximum Refund Guarantees
In terms of accuracy and interview style, I think all three are comparable if not nearly identical. In fact, I’m certain they all dissect each other’s products annually to ensure this. As such, all three offer a “Maximum Refund Guarantee” as well as a “Accuracy Guarantee” that states that they will pay any penalty and interest assessed by the IRS or your state due to calculation errors on their part (though H&R Block limits this to $10,000).
In my opinion, the remaining major differentiating factors are price, time-saving features, and audit support. Now, there are various discounts and sales that pop up, but here I’m just comparing regular sticker prices.
- The most popular and most polished-looking user interface.
- Federal Deluxe regular price is $29.99. State return price is $36.99.
- Best import support from payroll providers and financial institutions for automatic import of W-2 and 1099 forms.
- Moderate audit support (you get help, but no in-person representation)
Bottom line: The time-saving choice if you have a lot of brokerage and/or bank 1099s to electronically import, or a lot of details to import from last year’s return and you used them last year. For those like me that would pay extra to avoid all that tax lot data entry.
- Cheapest overall with Federal Deluxe regular price at $9.99. Many can get by with Federal Free version. Cheapest state return at $8.00.
- Again, just as accurate as the others.
- Limited import support (worst of the three).
- Limited audit support (worst of the three).
Bottom line: The value choice if you just want reliable DIY tax return software and don’t need any extras.
- Federal Deluxe regular price is $29.95. State return price is $34.95.
- Moderate import support for 1099s and W-2 (not as broad at TurboTax, better than TaxACT)
- Best free audit support, as it includes an H&R Block Enrolled Agent actually attending your audit in-person. Neither TurboTax and TaxAct not offer representation. However, you must think about whether you would hire your own representative in the actual event of an IRS audit (probably depends on severity).
Bottom line: The sleep-well-at-night choice if you want the assurance that a federally-authorized enrolled agent will guide you for free through a potential albeit unlikely audit.